Computer exporter pays $2.8 million fine for violations

Thursday, April 25, 2013

The U.S. Department of Commerce's Bureau of Industry and Security said Computerlinks FZCO of Dubai, United Arab Emirates, has agreed to pay a $2.8 million civil penalty following allegations that it committed three violations of the Export Administration Regulations (EAR).
The violations are related to the transfer to Syria of devices designed to monitor and control Internet traffic. In addition to the civil penalty, which is the statutory maximum, the company has agreed to submit to independent, third-party audits.
"Today's settlement reflects the serious consequences that result when companies evade U.S. export controls. It is the result of an aggressive investigation and prosecution by BIS of the unlawful diversion of U.S. technology to Syria," said Undersecretary for Industry and Security Eric L. Hirschhorn in a statement. "It is vital that we keep technology that can repress the Syrian people out of the hands of the Syrian government."
BIS alleged on three occasions in 2010 and 2011, Computerlinks FZCO engaged in transactions or took actions with the intent to evade the EAR in connection with the unlawful exports and re-exports to Syria of equipment and software obtained from Blue Coat Systems of Sunnyvale, Calif., designed for use in monitoring and controlling Internet traffic. The equipment and software are controlled due to national security and anti-terrorism reason, and as encryption items, and valued at approximately $1.4 million, BIS said.
Computerlinks FZCO was an authorized distributor in the Middle East for Blue Coat, distributing Blue Coat hardware and software products and providing support services to resellers and end users, including account, sales, and installation support and assistance. Under its distribution agreement with Blue Coat, Computerlinks FZCO was obligated to "comply with all export and import laws, rules, policies, procedures, restrictions, and regulations of the Department of Commerce." The distribution agreement also contained additional safeguards specially applicable to Computerlinks FZCO, including that all orders to Blue Coat were to specify the end user of the ordered items, BIS explained.
Computerlinks FZCO provided Blue Coat, the U.S. manufacturer and exporter, with false information concerning the end user and ultimate destination of the items in connection with these transactions, and knew that the items were destined for end users in Syria.
“However, when placing these orders with Blue Coat, Computerlinks FZCO falsely stated that the ultimate destination and end users for the items was the Iraq Ministry of Telecom (on two occasions) or the Afghan Internet service provider Liwalnet (on one occasion). The items subsequently were shipped to Computerlinks FZCO in the U.A.E. for ultimate delivery to Syria without the required licenses having been obtained,” the Commerce agency said.